In what is being hailed as a landmark victory for consumer rights, a $170 million settlement has been reached that could benefit hundreds of thousands of Australians.
Allianz Insurance has agreed to this substantial payout following a class action lawsuit over the sale of car dealer add-on insurance products sold between June 1, 2006 and September 27, 2021.
The class action, spearheaded by the legal firms Maurice Blackburn and Johnson Winter Slattery, accused that Allianz’s insurance products ‘had no, or very limited, value and were sold to consumers in ways that breached the law.’
A spokesperson from Maurice Blackburn conveyed to Yahoo Finance that the settlement, which was reportedly reached without Allianz admitting any liability, will affect an estimated 200,000 individuals who had the foresight to register their interest in the class action.
‘This is a significant outcome for consumers. It is one of the largest consumer class action settlements in Australia,’ said the spokesperson.
‘The sale of add-on insurance through car dealerships was widespread during the claim period, and had been criticised by the Australian Securities and Investments Commission (ASIC) over many years.’
ASIC previously investigated the sale of add-on insurance through car dealerships between 2013 and 2015 and found that consumers paid a staggering $1.6 billion in premiums yet received a mere $144 million in successful insurance claims.
Meanwhile, car dealerships reportedly received $602 million in commissions, which was over four times the amount paid out for claims.
The proposed settlement is now awaiting judicial approval, with a court hearing scheduled for March 11 to determine its fate. Maurice Blackburn said it was actively reaching out to potential beneficiaries via text messages, emails, and postal notices to inform them about the settlement.
If you are wondering whether you are eligible for a part of the $170 million settlement, if it gets approved by the court, here are the conditions:
- You must have purchased a vehicle from a dealership within the specified period.
- You must have bought add-on insurance products like Loan Protection Insurance, Motor Equity Insurance, Extended Motor Warranty, or Tyre and Rim Insurance issued by Allianz.
- You must have become liable to pay or have already paid a premium to Allianz for one of these add-on insurance products.
It is important to note that only those who registered for the class action before the deadline of July 15, 2024, at 4 pm may be considered for compensation, barring any further orders from the court.
The exact amount of compensation each affected will receive is still for confirmation.
‘Registered group members will share in the settlement pool. Their share will take into account how much they paid for their policy and whether they already received refunds or claim payments from Allianz,’ said a spokesperson of Maurice Blackburn.
Should the court approve the settlement, Maurice Blackburn and Johnson Winter Slattery will also claim 25% of the sum for legal costs. Additionally, $5 million will be set aside for reimbursement costs for the plaintiffs and the administration of the settlement.
For more information on the class action and to stay updated on the latest developments, affected individuals can visit the Maurice Blackburn website.
We at YourLifeChoices remind our readers to always keep an eye on the fine print and stay informed about your consumer rights.
Do you have any experiences to share regarding add-on insurance products? What are your thoughts on this topic? Join the conversation in the comments below.
Also read: Claim your share of bank payouts before it’s too late: You could be owed up to $144,000!
